University of Education

Bank Road Campus, Lahore

Department of Economics and Business
Administration

Internship Report
MCB Islamic Bank
A REPORT SUBMITTED TO THE DEPARTMENT OF ECONOMICS AND BUSINESS
ADMINISTRATION, UNIVERSITY OF EDUCATION, BANK ROAD CAMPUS,
LAHORE IN THE PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION (HONS).

Submitted By:
Roll Number: Bsf1700248
Name: Syeda Arshia Bukhari
Session: 2017 - 2021
Submission Date: 7th September 2021
 University of Education
Bank Road Campus, Lahore
Department of Economics and Business
Administration

1. LETTER OF UNDERTAKING

This internship report was submitted by Syeda Arshia Bukhari D/o. Syed Adeel

Ahmad Bukhari Roll No. Bsf1700248 for the partial fulfillment of the requirements for the degree

of

BBA (HONS.)
Session (2017-2021)
with specialization in
FINANCE
and is hereby accepted by the evaluation committee.

Internship Supervisor Dr. Nabila Asghar Khan

Dr. Nabila Asghar Khan

HOD / Coordinator

Principal Prof. Dr. Shagufta Andleeb

________________________
2. Dedication

I would like to dedicate my achievement to my parents and instructors, without whom I would not
be standing on this stairwell of my life.
3. Acknowledgement

All the praises and admires for ALLAH ALMIGHTY who enabled me to complete internship
report on MCB Islamic Bank.
I would like to acknowledge the efforts of my supervisor Dr. Nabila as she guided me about the
guidelines and procedure of internship report.
I would like to thank Sir Javaid Sultan Khan (Branch Manager) for providing me the opportunity
to have an excellent learning experience during my internship. Also, to Miss Hina Rasheed
(Branch Operations Manager) and Sir Awais Mansha (GBO) for supervising me and helping me
during my internship program and explaining me about the operations that are being carried out in
the bank and to all the co-operative staff members who helped me in different stages to complete
this report.
4. Executive Summary

MCB Islamic Bank Limited is the wholly owned subsidiary of MCB Bank Limited and
commenced its operations in 2015 with a nation-wide network of branches. The aim of MCB
Islamic Bank Limited is to be the first choice Shari’ah compliant financial services provider for
the customers and to carry out business purely in accordance with Shari’ah principles with full
conviction and devotion.
This report is an upshot of my Six weeks internship in MCB Islamic Bank Limited. Bank possesses
an imperative and historical importance in the banking sector of Pakistan. It always remains the
center of hustles in business activities.
The main purpose of internship is to learn, by working in practical environment and to apply the
knowledge acquired, during the studies, in a real-world scenario in order to tackle the problems.
In this report the detailed analysis of the MCB Islamic bank has been done and all the financial,
technical, managerial and strategic aspects have been evaluated to analyze the current position of
the organization. Along with it, the background analysis, the prevailing competition analysis, the
business process analysis, and the internal environment and external environment of the
organization have been discussed and the recommendations for the improvement have been made
wherever required.
Report is based on my experience, observations and discussions with the staff. In this report I tried
to explain my work during the internship period, which is based on customer dealing, filling of
deposit slips, account opening form, calling of customers, dak entry. In the end I gave my
conclusion and some recommendations that I feel was required and this report will provide a
complete and clear image about MCB Islamic Bank Ltd.
 Table of Contents
1. LETTER OF UNDERTAKING ........................................................................................................ 2
2. Dedication .......................................................................................................................................... 3
3. Acknowledgement.............................................................................................................................. 4
4. Executive Summary ........................................................................................................................... 5
5. Brief introduction to the industry ..................................................................................................... 8
6. Overview of the Organization ........................................................................................................... 8
6.1. Brief History ............................................................................................................................... 8
6.2. Mission Statement ....................................................................................................................... 9
6.3. Vision Statement ......................................................................................................................... 9
6.4. Introduction of the organization................................................................................................. 9
6.5. Corporate objective .................................................................................................................. 10
6.7. Competitors: ............................................................................................................................. 10
6.8. Business Volume ....................................................................................................................... 11
7. Organizational Structure ................................................................................................................ 11
7.1. Corporate Information ............................................................................................................. 11
7.2. Number of employees in branch ............................................................................................... 14
7.3. Comments on the organizational structure .............................................................................. 14
8. Plan of internship program ............................................................................................................. 15
8.1. Introduction of branch where I did internship ........................................................................ 15
8.2. Starting and ending dates of your internship ........................................................................... 15
8.3. Names of the departments in which I got training ................................................................... 15
9. Training Program ............................................................................................................................ 16
9.1. Operations performed by the departments .............................................................................. 16
9.2. Description of task assigned to me............................................................................................ 18
10. Marketing Functions ..................................................................................................................... 19
10.1. Products and Services ............................................................................................................. 19
10.2. Pricing strategies ..................................................................................................................... 24
10.3. Distribution channels .............................................................................................................. 24
10.4. Promotion ................................................................................................................................ 24
11. Human Resource Management ..................................................................................................... 24
11.1. Employee’s recruitment and selection .................................................................................... 24
11.2. Training & development ......................................................................................................... 25
 11.3. Performance management ...................................................................................................... 25
11.4. Compensation policy ............................................................................................................... 25
12. Financial Analysis .......................................................................................................................... 26
12.1. Ratio Analysis ......................................................................................................................... 26
12.2. Horizontal Analysis ................................................................................................................. 27
12.3. Vertical Analysis ..................................................................................................................... 28
13. SWOT Analysis.............................................................................................................................. 29
13.1. Strengths ................................................................................................................................. 29
13.2. Weaknesses.............................................................................................................................. 29
13.3. Opportunities .......................................................................................................................... 30
13.4. Threats .................................................................................................................................... 31
14. Conclusion...................................................................................................................................... 31
15. Recommendation ........................................................................................................................... 32
16. References & Sources .................................................................................................................... 32
5. Brief introduction to the industry:
MIB is a wholly owned subsidiary of MCB bank one of Nishat Groups major concern having
strong presence in the financial sector. Bank has developed strong relationships with its
customers by understanding their needs and treating them with respect, dignity and importance.
The driving force behind its commitment and services is its focus on customers, ensuring that it
not only meets, but also exceeds their expectation.
They strive to achieve excellence by ensuring that every moment of their time is spent in adding
value, making sure that they do things right, first time, and every time. With the quest of quality
MCB Islamic bank has always taken initiatives bringing banking into a new arena from branch
banking to internet banking and from face-to-face customer interaction to online accessibility.
It encourages diversity and treats each of its employees with fairness. It gives
constructive feedback for their continuous development and seeks suggestion from all employees
for further improvement. It ensures that quality performance is acknowledged and
rewarded and exercise utmost responsibility in decision making with regards to its employees.
Integrity of the employees is the strength of its performance.
MIB believe in achieving their mission and vision by working together as a combine group. It
treats its colleague as its internal customer and ensures that the requirements of internal customer
focus are always met. Equipped with in-depth product knowledge and recognizing the strengths in
each individual. It strives for optimum results from its co-workers and bringing out peak
performances by working towards common goals and objectives in today's dynamic banking
environment.
MIB focuses on three core businesses namely in Corporate, commercial and Consumer Banking.
The Bank provides 24-hour banking convenience with the largest ATM network in Pakistan. The
bank is operating through 183 branches in Pakistan. The overall control of the bank vests with
eight members of the board of directors including CEO & President. Board consists of two
independent directors and five non-executive members. Mr. Raza Mansha is the chairman of the
board.

6. Overview of the Organization:

6.1. Brief History

MCB Bank Limited is a Pakistani multinational commercial bank which is based in Lahore,
Punjab, Pakistan. The majority of shares are owned by Pakistani conglomerate Nishat Group and
Malaysian bank Maybank. It was incorporated by the Adamjee Group on July 9, 1947. The bank
was established to provide banking facilities to the business community of South Asia. The bank
was nationalized in 1974 during the government of Zulfikar Ali Bhutto.
This was the first bank to be privatized in 1991 and the bank was purchased by a consortium of
Pakistani corporate groups led by Nishat Group. As of June 2008, the Nishat Group owns a
majority stake in the bank. In 2005, the name of the bank was changed from "Muslim Commercial
Bank Limited" to "MCB Bank Limited".
In 2000, the bank established its Islamic Banking Business Group and opened its first branch in
2003, by 2014 the Islamic Banking network had grown to 34 branches. This was in addition to and
separate from bank's 1100 conventional banking branches. In 2015, given the potential of Islamic
Banking business, the bank proceeded to establish an independent but wholly owned subsidiary
bank named "MCB Islamic Bank Limited", referred to as "MIB "in short. MCB Bank Ltd
appointed Raza Mansha as its first Chairman of the Board of Directors and Ali Muhammad
Mahoon as the first President of the MIB.
The Bank functions under the supervision of a Shari'ah Board chaired by renowned Islamic scholar
Professor Mufti Munib-Ur-Rehman to deliver Shari'ah compliant value added and creative
banking products for consumers.

6.2. Mission Statement:

• To provide innovative Shari’ah compliant financial solutions and quality services to our
customers.
• To maximize returns in Halal manners for our shareholders.
• To nurture an internal environment of qualified professionals and cutting-edge technology.
6.3. Vision Statement:
To be the leading provider of Shari’ah Compliant Innovative financial
products with a focus on service quality and providing superior value for our customers,
shareholders, employees and the community.

6.4. Introduction of the organization:

MCB Islamic Bank Limited obtained its banking license from the State Bank of Pakistan on June
12, 2014, and Commencement of Banking Business on September 14, 2015. Hailed as the first
demerger transaction in the banking sector in Pakistan, through this transaction, the Islamic
banking business of MCB Bank in the form of 34 branches was segregated and demerged from
MCB Bank Ltd. and was transferred to MCB Islamic Bank Ltd. by operation of law.

The Bank currently operates to provide Shari’ah compliant value added and innovative banking
solutions for customers under the supervision of a Shari’ah Board chaired by the renowned Islamic
scholar Professor Mufti Munib-Ur-Rehman.

The Bank focuses on building strong and lasting relationships as well as delivering an experience
that satisfies all types of customers across Corporate, Commercial, SME, Consumer, Agriculture
and Micro sectors. The Bank offers wide range of Riba free and Shari’ah compliant products for
both personal and business needs.

The Bank is using world’s renowned Core Banking Software solution. Different services and
products offered by the bank are available to customers through a branch network of 170 plus
branches backed by 174 (162 Onsite, 12 Offsite) ATMs. The Bank offers Debit Cards, IOS and
Android based native Mobile Apps and Internet Banking services.

The Bank is committed to share in the mutual benefits with the customers, staff and shareholders
who participate in business success under the highly skilled and seasoned management with the
prime objective of ensuring customers satisfaction.

6.5. Corporate objective:

Following are the objectives of MCB Islamic Bank:

▪ Customer oriented business growth with focus on shari’ah based high technology
innovative product development, service excellence to attain customer satisfaction and
product network expansion.

▪ Development of motivated human resource having Islamic banking skills while ensuring
the transparent market-based remuneration practices.

▪ Providing value added services through operational expansion, geography and upgraded
system.

▪ Building a corporate culture of equality, trust and team spirit that remain dedicated to being
a socially responsible organization.

6.6. Policy of the organization:

The basic purpose of MCB Islamic bank is to promote and encourage Islamic principles. Bank
developed a comprehensive Shari’ah compliance framework for all areas of operations. All the
MIB’s products & services, contracts, structures, marketing advertisements, transactions and sales
must be compliant with shari’ah, the legal code of Islam (based on the teachings of the Qur'an).
The aim of bank is to be the first choice Shari'ah compliant financial services provider for the
customers and to carry out business purely in accordance with Shari'ah principles with full
conviction and devotion. Bank also prohibits taking interest on loans.

6.7. Competitors:

Following Banks can be termed as the competitors of the MCB Islamic Bank of Pakistan.
 • Meezan Bank
• Bank islami
• Faysal Bank
• Dubai Islamic Bank
• Al Baraka Bank
• Bank Alfalah Islamic
• Askari Bank
• Bank Al Habib Islamic
• Allied Islamic Bank
• National Bank
• Bank of Punjab

6.8. Business Volume:

Because of achieving its goals, mission, vision statement and tremendous efforts of MIB chairman
and directors, bank is developing day by day. It is moving towards modern technologies, building
new plans, innovations and providing further Islamic knowledge to its customers.

Business volume for the year 2020:

Total assets = 141171

Deposits = 99253
Islamic financing = 84896
Shareholder’s equity = 10728
Investment = 27618

6.9. Product Lines:

MCB Islamic Bank is a financial services provider. It offers savings and current accounts, term
deposits, and plus accounts. The company also provides phone and Internet banking, microfinance,
cash management, utility bill payment, and remittance services. MCB Islamic Bank caters to
corporate, commercial, SME, consumer, agriculture, and micro sectors.

7. Organizational Structure:

7.1. Corporate Information

Board of Directors

Mr. Raza Mansha (Chairman) Non-Executive Director

Dr. Khalid Zaheer Independent Director
 Ms. Seema Aziz
Mr. Ahmed Ebrahim Hasham
Mr. Ibrahim Shamsi
Mr. Aftab Ahmad Khan
Mr. Omair Safdar
Mr. Muhtashim Ahmad Ashai
Independent Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
President / CEO

Board of Audit Committee

Dr. Khalid Zaheer Chairman

Mr. Aftab Ahmad Khan Member
Ms. Seema Aziz Member
Mr. Omair Safdar Member

Human Resource & Remuneration Committee

Dr. Khalid Zaheer Chairman

Mr. Raza Mansha Member
Mr. Aftab Ahmad Khan Member
Mr. Omair Safdar Member

Risk Management & Portfolio Review Committee

Mr. Omair Safdar Chairman

Mr. Ahmed Ebrahim Hasham Member
Mr. Ibrahim Shamsi Member
Mr. Muhtashim Ahmad Ashai Member

Board Evaluation Committee

Dr. Khalid Zaheer Chairman

Mr. Omair Safdar Member
Business Strategy & Service Quality Review Committee

Mr. Raza Mansha Chairman

Mr. Aftab Ahmad Khan Member
Mr. Ahmed Ebrahim Hasham Member
Ms. Seema Aziz Member
Mr. Muhtashim Ahmad Ashai Member

I.T. Committee

Mr. Raza Mansha Chairman

Dr. Khalid Zaheer Member
Mr. Ibrahim Shamsi Member
Mr. Muhtashim Ahmad Ashai Member

Shari'ah Board

Prof. Mufti Munib-ur-Rehman Chairman

Mufti Syed Sabir Hussain Resident Shari'ah Board Member
Mufti Nadeem Iqbal Shari'ah Board Member

Chief Financial Officer

Syed Iftikhar Hussain Rizvi

Company Secretary

Ms. Maimoona Cheema

Head of Internal Audit

Mr. Muhammad Tariq Gondal

Legal advisor

M/s Imtiaz Siddiqui & Associates, Advocates & Solicitor

Auditors

M/s KPMG Taseer Hadi & Co., Chartered Accountants

7.2. Number of employees in branch:

Staff members Designation

Javaid Sultan Khan Branch Manager
Hina Rasheed Branch Operations Manager
Awais Mansha GBO
Ana Maqsood Cashier
Fraz Ali Ashraf BDO
Shahzad Ali TSO

Number of employees:

MCB Islamic Bank has 1500 total employees across all of its locations.

Registered office:

59-T Block, Phase-II, DHA, Lahore.

7.3. Comments on the organizational structure:

The structure of MCB Islamic is pretty managed and well controlled. It is divided into divisions
and departments. Each division is liable to achieve its targets so that the organization can overall
achieve its goals. Various key performance indicators are used to evaluate and to compare the
overall performance of the bank. There are departments with watching eyes that whether each
department is performing its duties or not. Moreover, the bank has a shari’ah board that follow
the Islamic principles. In this way these divisions and departments make the organizational
structure strong.
8. Plan of internship program:
8.1. Introduction of branch where I did internship:

The branch where I did internship is located at Shahdara, Main Sheikhupura Road, Jiya Musa,
Lahore. I joined MCB Islamic Bank on 28th July. The plan behind to join this bank is to gain
knowledge about Islamic banking. This report will show the background of MCB Islamic Bank
and major services that are provided to its customers and employees. MCB Islamic Bank Limited
is a wholly owned subsidiary of MCB Bank Limited.

MIB is a bank with sustainable growth and has witnessed an increase of 22.6% in its customer’s
deposit, improving its system share. The Bank’s continuous focus on the Islamic banking, also
known as non-interest banking, that is based on the principles of Islamic or Sharia law and guided
by Islamic economics. Two fundamental principles of bank are the sharing of profit and loss, and
the prohibition of the collection and payment of interest by lenders and investors.

The Bank witnessed a robust growth in its loan book. The Bank is operating through 183 branches
in Pakistan. The overall control of the Bank vests with eight members of the Board of Directors
including CEO & President. Board consists of two independent directors and five non-executive
members.

During my internship it was an immense pleasure for me to be there to serve for some time period.
I experienced different type of tasks. I started from the filling of deposit slips, calling of customers,
and greeting of customers. I also learnt about account opening form, home remittance form, inward
and outward clearing and record keeping.

8.2. Starting and ending dates of your internship:

I start the internship from 28th July 2021 to 7th September 2021. I learned a lot during my
internship.

8.3. Names of the departments in which I got training:

Clearing department

Accounts department

Customer service department

Home remittance

Record keeping
I was able to enhance my communication skills as I was asked to call customers and inform that
their ATM cards are ready to be received and sometimes to inform customers that their cheque
books are ready. I kept records of all my work to avoid any misunderstanding or problem.

I was taught how to fill the account opening form with key details like name, address, phone
number, email, is it a debit or credit card, is it a single or joint account, and information about kin
with a lot of consideration. My supervisor explained me about outward clearing. Moreover, I
manually keep record of all the dak received. I also learned how to fill deposit slips, home
remittance form.

The duration of internship was 6 weeks.

9. Training Program:
9.1. Operations performed by the departments:

Clearing Department:

Clearing means collection of cheques receive from our customers but drawn on other banks.
Receiving the instruments deposited by customers posting the amount of instruments in credit
of customer’s account if cheque returns from the concerned bank, the customer account is
debited. Crossing stamp is put on the instrument and slip given to customer on receipt of the
instrument. Clearing stamp and “payee account credited” are put on the instrument and the
voucher. Clearing House has provided this facility. Clearing house facilitates different banks in
one city to get their cheques drawn upon other banks to be cleared.

Inward Clearing:

In the morning time banker receives the inward clearing from the NIFT employee and counts the
instruments which are received and match it with the summary which is also attached with these
instruments. Then banker post these instruments either by himself or handover those to computer
operator. After posting all these instruments they are manually entered in the clearing sheet in its
debit side.

Outward Clearing:

Outward clearing is to send the cheques to other banks. When the account holder of our bank
receives payment from any other party in the form of cheque and that cheque is not of our bank or
branch and our account holder deposits it in his MCB Islamic account then that cheque has to pass
from the process of outward clearing.

All the cheques deposited in one day of other banks are then sent through the NIFT to the SBP
which sends them to the head offices of their respective banks which through NIFT sends the
instruments to the respective branches from which they were issued either if they are passed or
held to be bounce. This process of outward clearing is opposite to the process of inward clearing.

Accounts Department:

Opening of account is the most important department of the Branch as this is a contract between
the customer and bank. All future transaction and operation are carried out as per this contract
and any deviation may jeopardize the bank’s interest. The opening of a new account is the
establishment of customer banker relationship. By opening an account at a bank, a person
becomes a customer of the bank. The customers can open following accounts:

• Asaan Account (Current Account / Saving Account)

• Profit and loss sharing Account (PLS A/C)

• Basic Bank Account (BBA A/C)

• Fixed Deposit (FDR/TDR)

Account Opening:

When a client comes to the bank and makes a request for opening of an account. The officer says
that first fill up a prescribed application form. If he/she wants to open a PLS A/C, then he/she has
to fill a form according to the account.

Issuance of Cheque Book:

After opening an account with the bank, the account holder once again makes a request in the
name of bank for the issuance of a cheque book. The account holder mentions title of A/C,
account number, sign it properly and mentions the no of leaves he requires.

Customer services:

All the necessary activities to better serve the customers are performed here. First of all, I learnt
to behave well with the customers as these are the biggest assets of organization in this world of
neck-to-neck competition. Different functions that are performed include filling the deposit slips
for customers, filling the home remittance form. General help and guidance are provided to the
customers relating their problems. Any sort of information regarding any issue or product is
provided at this desk.

I learnt all these things in very friendly and stress-free environment. It was a good experience
spending time at this desk. I observed that the behavior of customer service officers is very good
and appreciable with customers that is a source of satisfaction for customers and is helpful in
increasing goodwill of bank and generating a positive word of mouth.

Home Remittance:

Home Remittance is geared and tooled to provide the most accurate, timely and efficient
distribution of remittances to the beneficiaries in Pakistan. With a network of more than One
hundred & seventy-Five branches across Pakistan, accessibility to customers is more convenient.

MCB Islamic bank offered quick and free home remittance facilities to overseas Pakistanis to
beneficiaries in Pakistan received through arrangement of correspondent banks and exchange
companies. Bank has excellent technology, processes and customer services to provide quick
remittance services to all overseas Pakistanis by delivery of their money to beneficiaries in
Pakistan. This service is cost free and available for all citizens across the country. Our home
remittance department has a dedicated team of customer service officers who are available to
respond to the queries of remitters and beneficiaries of the remittances.

Home remittance can be delivered to beneficiaries in Pakistan through Cash over the Counter or
credit in the account.

9.2. Description of task assigned to me:

I started my internship at the MCB Islamic bank on 28th July. I learned and explored a lot during
my internship. On my first day I was asked to observe all the activities and how to greet customers
and be courteous with them. Initially I performed certain small activities like binding papers and
documents with a punching machine.

Then my supervisor guided me to fill the deposit slips and he explained me to fill the slips very
accurately as the information should be correct and clear. I regularly filled almost 10 slips with
great responsibility. It taught me that it is essential to pay attention to each detail and write correct
spellings and details.

While working in the bank I was able to enhance my communication skills as I was asked to call
customers and informed that their ATM cards are ready to be received and sometimes to inform
customers that their cheque books are ready. I kept record of all my work to avoid any
misunderstanding or problem. I was assigned the duty to call home remittance customers to open
account at MIB and to call customers with low balance in their accounts to deposit cash.

I was taught how to fill the account opening form with key details like name, address, phone
numbers, email, is it a debit or credit card, is it a single or joined account and information about
kin. My supervisor explained me about outward clearing. Moreover, I manually keep record of all
the dak received.

10. Marketing Functions:

10.1. Products and Services:

MCB Islamic bank provides access to diversified financing options including deposits, corporate
banking, commercial banking, SME banking, sharia karobar, wealth management.
Deposits:
MCB Islamic Bank offers a wide array of Halal and RIBA free Islamic Banking products and
services to meet the requirements of individuals and businesses alike.
MCB Hidayat Current Account
MCB Asaan Current Account
MCB Asaan Saving Account
MCB Basic Banking Account
MCB Hidayat Foreign Currency Current Account
MCB Shandaar Account
MCB Imaan Saving Account
MCB Barkat Saving Account
MCB Barkat Saving Plus Account
MCB Barkat Saving Premium Account
MCB Barkat Super Saving Account
MCB Imaan Foreign Currency Saving Account
MCB Na’mat Plus Term Deposit
MCB Na’mat Premium Plus Term Deposit
MCB Na’mat Plus Foreign Currency Term Deposit
MCB Na’mat Term Deposit
Corporate Banking:
(Shari’ah Complaint Financing Solutions for Corporate Clients)

MIB Corporate Banking is focused on providing a range of diverse financial services (including
tailor made solutions) to corporate clients (including multinational and public entities), by
partnering with them and build long-term sustainable relationships. MIB teams within Corporate
Banking are situated in offices located in Karachi, Lahore, Islamabad, Multan and Faisalabad.
MIB’s in-house expertise of product specialists and Shariah scholars are well versed in providing
Shariah-compliant financing solutions to meet customer’s credit, trade, foreign exchange,
investment banking and various other business requirements in a hassle free, effective and efficient
manner across a diverse range of industries. MIB corporate banking team also liaison with
Treasury, Cash Management, Trade Investment Banking and Consumer Banking departments to
develop and deliver offerings that are used across diverse businesses.

Commercial Banking:
(Financing services for diversified industries)

Commercial Financing segment focuses on building strong & long-lasting relationships with its
customers by delivering satisfactory Shari’ah compliant solutions. To deliver excellent services,
commercial financing segment facilitates its valued customers by synergizing its specialized
team’s effort with bank’s outreach across the country. Through specialized skilled staff,
commercial financing team is providing appropriate financing solutions in Shariah-compliant
manner to meet financing, trade, foreign exchange, collection and various other business needs in
efficient manners to the entire satisfaction. Further, our specialized staff coordinate with bank’s
other relevant support groups for facilitating valued customers of diverse industries to fulfill wide
range of needs. Commercial Financing is catering financing needs of its worthy customer in
different manners.
SME Banking:
(Shari’ah Compliant Financial Solutions for Small & Medium Enterprises)
MCB Islamic Bank offers Shari’ah Compliant Financial solutions for Small and Medium sized
enterprises. These products have been designed by industry professionals in consultation and
close working with a team of Shari’ah experts. These products address Musharakah Running
Finance, Murabaha Finance, Finished Goods Murabaha, Musharakah Export Finance Foreign
Istisna Based pre-shipment Export Finance, Islamic Export Re-finance.

Sharai Karobar:
(A Microfinance Product)
For fulfilling the needs of growing business, MCB Islamic Bank Limited is offering Murabaha
Microfinance for Businessmen and women, through which they can avail financing up to PKR
500,000 as per their convenience and needs.

Wealth Management:
(Shari’ah Complaint Takaful Solution)
With increasing uncertainties, it is important to start planning for future whether it is preparing for
any emergencies, planning for future financial stability, buying a house or simply preparing for
children’s higher education or marriage. MCB Islamic Bank not only provides the best financial
consultancy but also gives access to highly customized Shari’ah complaint investment avenues
assuring that while you go on with your life your savings grow exponentially.

Digital Banking services:

In order to meet growing needs of the customers, MCB Islamic Bank offers following Digital
Banking products and services.

MCB Islamic Debit Card:

MCB Islamic Bank aim is to provide best services to its customers. In line with this vision, bank
have introduced “MCB Islamic Debit Cards” in alliance with UnionPay International & 1Link.
One can Withdraw Cash, Purchase and avail number of services offered at MCB Islamic ATM or
merchants and locations displaying UnionPay, 1-Link or Pay Pak Logos.
MCB Islamic Bank offers three variants of Debit Cards:
• Qadar Gold
• Qadar Classic
• Pay Pak Classic

MCB Islamic Phone Banking:

As a component of progressing responsibility to give helpful answers for managing account needs,
bank give you 24X7 Phone Banking services. Address Customer Service Representatives at
whatever time, anyplace and get a similar level of customized services and consideration that
would anticipate from an in-person consultation at branches.
Customers can make utilization of Phone Banking Services to:

Inter Bank Funds Transfer

Internet Banking Activation
Internal Funds Transfer (Third party & Own account)
SMS Alerts Activation
SMS Alerts Deactivation
T-Pin issuance
Debit Card Activation
Debit Card Blocking
Debit Card Replacement Request
Account Balance
Account Statement
Product and Services information
Cheque Book request
Pay Order/Demand Draft request
Bank Statement request
Branch and ATM Location inquiries

MCB Internet Banking:

Internet Banking is a helpful approach to perform banking from the comfort of home or office.
Stay away from the queues or delays and attempt simple and secure Internet Banking service for
an unmatched online banking experience. Services includes:

View Account Balance

View Account Statement
Debit Card Management
Own Account Fund Transfer
Fund Transfer Within MCB Islamic Bank
Inter Bank Fund Transfer
Utility Bill Payments & Mobile Top Ups

MCB Mobile Banking:

Mobile App can be downloaded from “Google Play” and “App Store”. Mobile App is an extension
of Internet Banking Service and same user credentials would be used to login into Mobile App.
Mobile App can be activated/de-activated through MCB Islamic Internet banking
“Activate/Deactivate Mobile App” option in Preferences TAB.
Services offered:

View Account Balance and request statements

Fund Transfer Within and outside MIB
Utility Bill Payments
Educational payments
Airline payments
Touch ID / Finger Scan Based Login
Electronic Funds Transfer:

Electronic funds transfer (EFT) is transfer of money from one bank account to another either within
same or to any other financial institution initiated through alternative delivery channels such as
POS terminals, ATMs, mobile banking, internet banking, call center banking, branchless banking
platforms, PRISM and any other channel as and when approved by SBP.

10.2. Pricing strategies:

Bank has reasonable prices of products and services which it offered to their customers.

10.3. Distribution channels:

Distribution channels of MCB Islamic bank are:
MIB Internet Banking.
MIB Mobile.
ATM
Call Center.
E-Statements.
SMS Alert
10.4. Promotion:
Customers are everything so bank trying to focus more on the customer-based policies so that the
customer’s confidence can be won.

11. Human Resource Management:

11.1. Employee’s recruitment and selection:

MIB posts its job openings on their website. Then the recruiter review CVs of all the applicants
and call the selected applicants. After interviewing applicants on the call, the shortlisted applicants
are invited for an interview. Interview is conducted by HR staff members. They hire the employee
on the basis of commitment, dedication, education, specific skill set required for the job,
confidence, good communication and other related factors are considered. There is no element of
favoritism, no superiority is given to any applicant, and everything is conducted on the basis of
HR policies of Pakistan.

11.2. Training & development:

After recruitment and selection of employees next step is to train them so that they can perform
well. MCB Islamic bank provides different training sessions to employees. Training and
development are an integral part of the company’s development activity. Training involves change
in attitude, skills or knowledge of an employee with the resultant improvement in the behavior.
For training to be effective it has to be a planned activity conducted after a thorough need analysis
and target at certain competencies, most important it is to be conducted in a learning atmosphere.
While designing the training program of employee’s bank kept in mind both the individual and
organizational goals. MIB trains its employees for development of their skills and knowledge
regarding Islamic banking principles.

11.3. Performance management:

In MCB Islamic performance management consists of two elements individual work and organizational
goals to achieve alignment and continuous improvement. Performance management is done on the basis of
recognition that how much an employee is benefiting or giving profit to the organization.
Employee’s attendance is checked. Employee’s skills, behaviors, hard/smart work, punctuality,
adaptiveness, ability to learn and grow for the betterment of the bank, such things are considered.

11.4. Compensation policy:

Compensation is a tool used by management to create happier workplaces. Compensation policies
can be accustomed according to the business requirements, goals, and existing resources.
Bank used Compensation strategies:

• To hire and retain top performer employees.

• increase the satisfaction level of employees.
• reward and recognition programs to inspire peak performance.
• lessen turnover and boost loyalty.

According to MIB, appropriately compensated employees feels that they add value to the
company. When employees feel appreciated, they feel good about coming in to work. Henceforth,
the morale of all employees’ upsurges and people are encouraged to come to work with a good
performance. Furthermore, when employees know that they will get a bonus or incentives, they
will be highly motivated to deliver better results. Bonus and incentive compensation plans become
a crucial point for business success.

12. Financial Analysis:

12.1. Ratio Analysis:

2018 2019 2020

Quick Ratio 1.438 4.887 0.681
Asset to Equity Ratio 9.424 10.033 13.159
Investment to Deposit Ratio 1.010 1.170 1.057
Investment to Assets Ratio 84.616% 69.961% 80.288%
Solvency Ratio -0.310% -1.159% -0.187%
Net Operating Margin -41.208% -4.155% 9.290%
Profit before tax ratio -23.485% -72.952% -8.433%
Return on Equity 18.908% 38.156% 40.973%
Return on Assets 2.427% 4.130% 3.594%
Return on Capital Employed -0.409% -1.682% -0.310%
12.2. Horizontal Analysis:
Base Year Year-on-Year
2017 2018 2019 2020
Balance Sheet
Cash and Balances with treasury Banks 100% 206% 147% 96%
Balances with other Bank 100% 53% 620% 57%
Due from Financial Institutions 100% 334% 125% 14%
Invesments - Net 100% 138% 128% 169%
Ismaic Financing and related assets -Net 100% 201% 82% 165%
Fixes Assets 100% 123% 221% 96%
Intangible Assets 100% 108% 137% 89%
Deferred Tax Assets - Net 100% 259% 123% 95%
Other Assets - Net 100% 273% 221% 117%
Total Assets 100% 183% 111% 134%

Bills Payable 100% 415% 75% 254%

Due to Financial Institution 100% 98% 53% 499%
Deposits and Other Accounts 100% 224% 112% 121%
Other Liabilities 100% 2039% 315% 107%
Total Liabilities 100% 201% 111% 138%

NET ASSETS 100% 105% 104% 102%

Share Capital 100% 112% 103% 100%

Reserves 100% 100% 100% 258%
Surplus - (Deficit) On revaluation of assets - Net of tax 100% -66% 319% 112%
(Accumulated Loss) - Unappropriated Profit 100% 664% 119% 89%
Equity 100% 105% 104% 102%
Profit and Loss Account
Profit / Return Earned 100% 204% 234% 98%
Profit/ Return Expensed 100% 229% 254% 90%
Net Spread Earned 100% 180% 210% 110%
Other Income
Fee and commisson Income 100% 350% 182% 107%
Dividend Income 100% 69% 130% 63%
Foreign Exchange Income 100% 497% 43% 330%
Gain / (Loss) On securities 100% 7% -620% -13%
Other Income 100% 124% 152% 455%
Total Other Income 100% 91% 86% 198%
Total Income 100% 154% 188% 117%
Other Expenses
Operating Expenses 100% 167% 145% 104%
Workers Welfare Fund
Other Charges 100% 3580% 532% 2%
Total Other Expenses 100% 167% 146% 104%
Profit / Loss Before Provisions 100% 224% 21% -246%
Provisions / ( Reversal of Provision) and right offs - Net 100% -1658604% 22% 8%
Extraordinary / Unusual Items
Profit / Loss Before Taxtation 100% 479% 22% -107%
Taxtation 100% 664% 21% -151%
Profit / Loss After Taxtation 100% 417% 22% -86%
Basic and diluted earning / (loss) per share - after tax 100% 375% 22% -83%
12.3. Vertical Analysis:
Vertical Ratio Analysis from Year 2017-2020
2017 2018 2019 2020
Cash and Balances with treasury Banks 6.55% 7.37% 9.76% 6.99%
Balances with other Bank 5.22% 1.50% 8.40% 3.54%
Due from Financial Institutions 2.71% 4.93% 5.57% 0.59%
Invesments - Net 17.75% 13.40% 15.53% 19.56%
Ismaic Financing and related assets -Net 60.51% 66.29% 48.86% 60.14%
Fixes Assets 4.13% 2.76% 5.50% 3.93%
Intangible Assets 0.94% 0.55% 0.69% 0.45%
Deferred Tax Assets - Net 0.56% 0.79% 0.88% 0.62%
Other Assets - Net 1.62% 2.41% 4.81% 4.18%
Total Assets 100% 100% 100% 100%

Bills Payable 0.75% 1.54% 1.03% 1.89%

Due to Financial Institution 18.82% 9.20% 4.37% 15.79%
Deposits and Other Accounts 77.62% 86.42% 86.57% 76.09%
Other Liabilities 0.28% 2.84% 8.03% 6.23%
Total Liabilities 100% 100% 100% 100%

Share Capital 104% 111% 110% 108%

Reserves 0% 26444 0% 1%
Surplus - (Deficit) On revaluation of assets - Net of tax -2% 132272 4% 4%
(Accumulated Loss) - Unappropriated Profit -2% -1289202 -15% -13%
Equity 100% 100% 100% 100%

Profit and Loss Account

Profit / Return Earned 100% 100% 100% 100%
Profit/ Return Expensed 48.80% 54.76% 59.45% 54.58%
Net Spread Earned 51.20% 45.24% 40.55% 45.42%

Fee and commisson Income 10.55% 40.64% 85.78% 46.66%

Dividend Income 19.27% 14.53% 21.96% 7.03%
Foreign Exchange Income 6.80% 37.13% 18.55% 30.95%
Gain / (Loss) On securities 60.99% 4.44% -32.04% 2.10%
Other Income 2.39% 3.26% 5.75% 13.25%
Total Other Income 100% 100% 100% 100%

Total Expenses 100% 100% 100% 100%

Operating Expenses 99.99% 99.85% 99.46% 99.78%
Workers Welfare Fund 0.00% 0.00% 0.00% 0.21%
Other Charges 0.01% 0.15% 0.54% 0.01%

Profit / Loss Before Provisions 100% 100% 100% 100%

Provision/ Net Off 0.02% -114.16% -120.41% 3.74%
Profit / Loss Before Taxtation 0.00% 0.00% 0.00% 0.00%
Taxtation 25.05% 74.47% 73.61% 45.25%
Profit / Loss After Taxtation 74.93% 139.69% 146.80% 51.01%
13. SWOT Analysis:

The SWOT analysis consists of analyzing the organizational strengths, weaknesses its
opportunities and threats which are related to external environment. Similarly, MCB Islamic also
have some strengths, weaknesses, threats and opportunities.

13.1. Strengths:

MIB was formed as a banking company in May 2014. It is a wholly owned subsidiary of MCB
one of Nishat Group's major concern having strong presence in the financial sector. MIB started
its commercial operations in October 2015. It has a good brand image as an Islamic bank. Overall
performance of bank is increasing day by day. The Bank is operating through 183 branches in
Pakistan. All the branches are online.

The Bank offers wide range of Riba Free and Shari’ah compliant products for both personal and
business needs. It has dedicated shariah supervisory board comprising of world renowned shariah
scholars.

The Bank focuses on building strong relationships as well as delivering an experience that satisfies
all types of customers across Corporate, Commercial, SME, Consumer, Agriculture and Micro
sectors.

The Bank offers Debit Cards, IOS and Android based Mobile Apps and Internet Banking services.
Moreover, the Bank has also developed its suite of Cash Management services including Payment
upon Identification (PUI), Cash & Instrument Collection, Cash in Transit Services (CIT),
Corporate Internet Banking by acquiring Oracle Banking Digital Experience (OBDX) and also
working on development of product suit for Employee Banking under Cash Management.

Bank has efficient and experienced management involved in decision making and bringing
significant changes. Bank has professional and committed employees.

13.2. Weaknesses:

Although employees are professional and committed but they are not satisfied with their job.
Dissatisfaction is mainly caused by ill treatment and improper reward system. Promotions are not
offered frequently. Employee turnover rate is high because there lacks loyalty among employees.
To give everyone equal protocol is lacking among employees.

Although staff is proficient but unwilling to serve better during audit due to extreme pressure put
by the auditors. Most of the employees are young they have more tendencies to switch the bank in
order to seek better opportunities to prohibit this high motivation is required which is not
dominated.

Customers face problem of NADRA verification while opening their accounts because its process
is time consuming and inefficient.

Customers having account with small amount are not given same services as dealing to others who
have high amounts in their accounts. Due to this reason the bank may lose good clients.

MIB having no presence outside Pakistan because of which companies prefer other banks.

Lack of decentralization. Bank is planning to restructure its departments and is going to be

centralized very soon. Decision making process is very slow.

Bank faces electricity issues. There is shortage of staff which puts burden on employees.

13.3. Opportunities:

Because of rapid growth of technology there are better opportunities for bank to move towards
improved technology usage, this can help bank to serve its customers better any time and
anywhere.

Increase in Islamic banking operations can attract a good customer range which will enhance the
market share of the bank. MIB can grow by increasing awareness about Islamic financial services
and demand for shariah compliant products and services.

There are more opportunities to open branches in rural areas so as to increase its branch network
and operations.

Frequent training sessions, free and fair promotions, better reward system can make employees
more committed to their work and dedicated to MIB.

MCB Islamic can improve their customer service as there is always a room to add innovative
techniques and polices which could lead to additional proficiency of the institution. Bank recently
introduces Mobile banking service, but most of the customers are unaware of the service and bank
could work on adverting it to give benefits of it to their clients.

13.4. Threats:

Global economic crises have affected all the economies and financial sectors a lot MCB Islamic is
not out of its range. People are losing their trust in bank.

Pakistan political system is highly unstable being a threat for MIB. Instability of government and
their policies is another point to worry.

War against terror in Pakistan and neighboring countries is the greatest threat of this time to the
whole economy and banking sector of economy and banking sector of Pakistan.

Continuously rising competition in Islamic banking sector is one of the major threat.

Establishment of many foreign banks in Pakistan is very threating for all local banks including
MCB Islamic. The market share is mainly influenced by this phenomenon.

Customers have misconceptions and misunderstandings about Islamic banking that effect bank
performance.

14. Conclusion:

MIB is giving better services to its customers as well as better facilities to its employees and they
are making an untiring effort to increase the profit of the bank on year-to-year basis as well as
doing their best to increase the wealth of the shareholders. Bank is facing technological and
electricity issues. There is lack of motivation among employees. Bank is offering many products
to its customers which are increasing the margin of the bank. The main problem faced by the Bank
is the lack of Islamic banking concept that lacks in the society, and they are unaware of the benefits
of Islamic banking due to which the trend is not as much like conventional banking. The rate that
MIB is offering less than the conventional Bank. So, people tend to move towards these banks
because of better rates, not knowing about the Islamic rules that are applied here at Islamic banking
that keeps them away from Halal and Haram.

15. Recommendation:

The bank should convert paperwork and file system to a digital format. Now a days software’s
have been much established so the bank should take measures to reduce paperwork load from their
employees by introducing latest digital systems. The bank should provide perks and benefits to
each and every employee on the basis of their performance. Like proper employee space, common
room, separate prayer area, proper washrooms it means a whole new and well-established building
for office employees. Bank should provide reward system to the employees for motivating them
to work harder. Bank should arrange general public awareness programs like seminars, workshops
and question answer sessions for building the true image of Islamic banking and removing
misconception about Islamic banking. All staff members are strongly recommended to follow the
proper dress code. More focus is needed on product & Shari’ah trainings of corporate, commercial
and SME banking and it is recommended to ensure mandatory product and shari’ah trainings of
all staff members before launching new products. There should be some activities for enhancing
employee’s mind. Bank should manage some trips so employees can relief their stress by taking
part in these activities.

16. References & Sources:

https://www.mcbislamicbank.com/

https://www.mcbislamicbank.com/about-mib/about-us/

https://www.e360.pk/service-details/remittance-service-3623.html

https://www.mcbislamicbank.com/assets/documents/Pacra-Ratings-June-2021.pdf